19th Oct 2015 07:32
LONDON (Alliance News) - Shares in London opened slightly higher, but with mining stocks trading lower after a mixed set of data from China, whose gross domestic product growth weakened but beat economists expectations.
The FTSE 100 index opened up 0.3% at 6,396.10 points, the FTSE 250 was up 0.4% at 16,959.45, while the AIM All-Share was up 0.2% at 742.60. In Europe, the French CAC 40 was up 0.3% and the German DAX 30 was up 0.5%.
"Whatever nascent gains the FTSE is posting are under threat from its commodity sector, which seems a bit spooked after this morning's Chinese data dump, with the majority of the UK index's key oil and mining stocks slipping into the red soon after the bell," warned Spreadex analyst Connor Campbell.
"If this situation worsens the FTSE might find it very hard to hold onto any growth as the day continues," Campbell added.
All FTSE 350 Mining Sector Index constituents were in the red, with the index down 0.7%. Randgold Resources was down 1.7%, Fresnillo down 1.4% and Anglo American down 1.1%.
The Chinese economy expanded by more than expected, on the back of strong service sector performance, although growth eased marginally in the third quarter compared to the first two quarters.
Gross domestic product grew 6.9% year-on-year in the third quarter, slightly slower than the 7.0% expansion each seen in the first two quarters, the National Bureau of Statistics said Monday. Economists were expecting the growth rate to ease to 6.8%. The latest figure is only slightly below the government's target of about 7%.
Another report from the NBS showed that the growth in industrial output slowed to 5.7% in September from 6.1% in August. It was the weakest since March when production climbed 5.6% and was slower than the expected growth of 6%.
Meanwhile, Chinese retail sales grew at a slightly faster pace of 10.9% year-on-year in September following August's 10.8% rise. Retail sales were forecast to grow 10.8% again in September.
During the January to September period, fixed asset investment in China advanced 10.3% from the same period of last year, slower than a 10.8% rise expected by economists. In the first eight months of the year, investment gained 10.9%.
Growth in Chinese housing sales moderated to 18.2% in the January to September period from the 18.7% expansion registered in the first eight months.
Asian stocks were still lower but taking back some earlier losses, with the Hang Seng in Hong Kong trading down 0.2%, while the Shanghai Composite ended down 0.1%. The Japanese Nikkei 225 index closed down 0.9%.
Oanda analyst Craig Erlam said the Chinese data should be seen "as win win" from an investor standpoint.
"The GDP reading was better than the market was expecting which ensures that the 2015 7% target is still achievable, while industrial production and fixed asset investment figures were so weak that further monetary and fiscal stimulus this year looks increasingly likely," Erlam said.
Irish pharmaceutical Shire was leading blue-chip decliners, down 1.9%, after it said the US Food and Drug Administration has requested an additional clinical study be undertaken as part of its complete response letter to the new drug application made for the company's lifitegrast drug for treating signs and symptoms of dry eye disease.
The FDA also requested more information on the product quality, Shire said.
The company said it has recently completed a phase 3 study on lifitegrast which, if positive, will form the basis of its response to the US regulator's letter.
"We were disappointed, but will soon have data from the Phase 3 study, OPUS 3," said Flemming Ornskov, Shire's chief executive.
Meanwhile, Associated British Foods was down 0.5% after being downgraded by Berenberg to Hold from Buy.
In the economic calendar, in the US, the NAHB housing market index is due at 1500 BST. At 1700 BST, Federal Reserve Bank of Richmond President Jeffrey Lacker speaks at an event hosted by the Virginia Chamber of Commerce and the Virginia Early Childhood Foundation.
By Daniel Ruiz; [email protected]
Copyright 2015 Alliance News Limited. All Rights Reserved.
Related Shares:
Anglo AmericanRandgold ResourcesFresnilloShireAB Foods